Strange catalyst in reform battle

LOS ANGELES -- What seemed like a shot to the heart ended up being a call to arms.

To the casual observer, Scott Brown's election to replace the late Ted Kennedy in the U.S. Senate on Jan. 19 looked as if it would be the death knell for Democrats' efforts to reform the nation's health care system. Brown's election was yet another signal that Democrats, unable to organize and get the public to hear their message on health care, were again wandering aimlessly on big issues.

So President Barack Obama, who had yet to propose a comprehensive plan on health care, stepped in and took over. But he needed a way to get his party to focus.

Enter WellPoint Inc.

"It was absolutely a momentum changer," said Margie Omero, president of Momentum Analysis, a Democratic consultant.

The momentum changer that Omero spoke of was WellPoint's plans to raise individual policy premiums by up to 39 percent through its Anthem Blue Cross subsidiary in California. Obama seized on the issue three weeks after Brown's election, when he called upon Congress to have another go at health reform.

It proved to be just what the doctor ordered, as Democrats eventually pulled it together and got the measure passed. That culminated in the House's vote last Sunday to send the main health care bill to Obama's desk for his signature, and Thursday's Senate approval of a "sidecar" budget measure that needed only a simple majority.

Meanwhile, health care reform had taken another ironic turn. The very industry that had risen up to oppose the measure ended up providing its proponents with the ammunition. It was a rallying cry that gave Democrats a critical talking point to make their case, political observers say. It also put Obama in the fight that many political observers say he watched from the sidelines.

"It just showed the hubris of the insurance industry, that they would do this while it was being debated," Omero said, later adding: "It was a visible fact that the press and the public could hold on to."

The WellPoint issue first came to the president's attention via the Los Angeles Times, which had reported on the company's plans just before Obama made his remarks on Feb. 9. The company actually had sent out notices in November informing policyholders of the planned cost shifts.

"If we don't act, this is just a preview of coming attractions," Obama said in a White House news conference. "Premiums will continue to rise for folks with insurance; millions more will lose their coverage altogether; our deficits will continue to grow larger. And we have an obligation -- both parties -- to tackle this issue in a serious way."

When confronted with the reports, the insurance industry insisted -- and still maintains -- that skyrocketing health care costs are the reason for the price hikes.

"Other health insurers have been forced to raise premiums as well and I think people have come to realize during this debate that health insurance companies don't determine the cost of health care -- they reflect it," WellPoint spokesman Jerry Slowey said in an e-mail.

Slowey added there are positives for the company in the health care bill.

"As regards to the bill itself, we've long been advocates of expanding access to the uninsured and are extremely pleased to see that more Americans will now have access to coverage," he said. "We remain concerned, however, about the lack of long-term cost containment measures that will make the system sustainable, and look forward to working with our elected officials in the coming months and years on this important issue."

Washington lobbyists who have argued for and against the bill on behalf of various clients say that the WellPoint price hikes weren't the only momentum changer for Obama and the Democrats. There was the pep rally with senators shortly after Brown's election, a summit with Democratic and Republican congressional leaders and, most of all, Obama's engagement in the issue and his subsequent campaign for it.

Other than exhortations to Congress to get some sort of health care reform passed, Obama had remained largely silent on the issue.

Countless suggestions were circulating throughout the halls of Congress, but Obama had yet to come forward with his ideas, and many said he didn't help sell it enough to the public.

That showed up particularly among seniors, said Carol McDaid, a principle at Capitol Decisions in Washington, who lobbies for the Coalition on Whole Health, a group seeking equal treatment for mental diseases as well as substance abuse. As a result, seniors were left to listen to Republican fear-mongering on the issue, she said.

"They're (seniors) politically active because they have the time, and they're sensitive to fear-mongering. That's a wicked combination," McDaid said. "I'm not sure it passed with a majority of senior support."

McDaid, who also was in Washington when the Clinton administration tried to pass its own version of health reform, said Obama was a bit leery of repeating the same mistakes. While Clinton's people were overly active in formulating that failed measure, Obama left it to lawmakers to fashion this bill -- perhaps too much, McDaid said.

"I think there was a sense that this administration had overlearned the lesson that (Clinton) learned," she said. Brown's election proved to be more of a wake-up call for Democrats and Obama in particular, she said.

A key catalyst, however, proved to be WellPoint.

"The insurance industry played right into everybody's hands with those rate hikes," McDaid said.

Dean Rosen agrees. Rosen is a partner and health care specialist with Mehlman Vogel Castagnetti Inc. in Washington, a lobbying firm that represents a number of diverse companies in pharmaceuticals, biotech, doctors and insurers, including Humana Inc. (HUM)

"It gave them a focus, rather than shifted momentum," he said. "I think they would have passed in anyway. But it gave them a plot line. It gave them a villain."

Yet many find it puzzling that WellPoint was held up as the pariah in this instance.

For one, WellPoint may well have been unfairly singled out. The Indianapolis-based company says it wasn't the only company to impose massive rate hikes, as some went up more than 80 percent.

Further, Obama keyed in on 39 percent hikes at WellPoint, even though it later was reported the company itself had jacked up rates as much as 69 percent for some customers.

And while the double-digit premium hikes of WellPoint and others created a sense of outrage, few -- if any -- measures in the final reform bill addressed the issue of spiraling insurance costs. WellPoint still wants to raise its rates, though it has delayed implementing them in California. Regulators are scrutinizing the company's plans, but appear powerless to block them at this point.

Rosen says that WellPoint's price hikes provided a useful catalyst for the Democrats' cause, but more work will need to be done to actually make a dent in insurance inflation.

"It feels more like the end of the beginning as opposed to the end of the end," Rosen said.

ADVISORY: Users are solely responsible for opinions they post here and for
following agreed-upon rules of civility. Posts and
comments do not reflect the views of this site. Posts and comments are
automatically checked for inappropriate language, but readers might find some
comments offensive or inaccurate. If you believe a comment violates our rules,
click the "Flag as offensive" link below the comment.